BUS 211 Week 1 quiz

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BUS 211 Week 1 quiz 

 Instructions

 Your answers : 33/33 (100%)

§  1

What is the best way to raise funding for a joint-stock company?

Secure an investment bank loan.

Pool money from partners.

Issue stock certificates for investors.

 

Raise capital from interested stakeholders.

§  2

What law shows that there is a direct relationship between the
price of a product and the amount that is supplied in the market?

Law of supply

Law of demand

Law of market systems

Law of market price

§  3

Which of the following best describes a partnership?

All employees are stockholders to promote loyalty to the company

Skilled professionals who pool their talents and resources to
share general capital costs

Families who work and live together to reduce costs

Friends who share new business interests by sharing rent costs

§  4

What measures how efficient a company uses its capital and
resources to generate returns for its investors?

Profit

 

Profitability

Revenues

Sales

§  5

Who assumes all liability for debt created in a sole
proprietorship?

The stockholders

The business partners

The bank

The business owner

§  6

What is an obstacle that professionals avoid in a sole
proprietorship?

Debt

Disputes

Risk

Competition

§  7

What will most likely increase the demand for better quality
goods and services?

Increasing specialization

Increase in self-interest

Decrease in profitability

Decreasing demand

§  8

What law refers to the tendency of people to buy more of a
product when the price is lower and less of it when its price is higher? 

Law of diminishing marginal utility

Law of demand

Law of market increase

Law of supply

§  9

Imagine Company A has a total profit of $40 million and that it
invested $400 million in the course of a year. Company B has a total profit of
$20 million and has invested $80 million over the course of the year. Which
company has the greater profitability?

 

Company B

 

Profitability cannot be determined from the information given

Company A

They have the same profitability

§  10

In general, the more a particular product is valued, the more it
is demanded. Which is true in regard to this statement?

The higher the demand, the higher the price and the product is
easy to find.

The higher the demand, the lower the price and the product is easy
to find.

The higher the demand, the lower the price and the product is
harder to find.

The higher the demand, the higher the price and the product is
harder to find.

§  11

Capital, land, enterprise, and labor are all costs associated
with making and selling goods. What do they determine?

Operating costs

Value

Competitive advantage

Sales revenue

§  12

In economics, what principle indicates the value placed on a
product lessens as consumption increases?

Scarcity value

Demand value

Diminishing marginal utility

Supply utility

§  13

Which of the following is the best advantage of a joint-stock
company?

Investors determine the venture the company is required to
pursue.

The investor limits the risk to the percentage of stock
ownership.

The business is resilient to poor management.

Investors have limited liability from creditors.

§  14

Information technology, e-commerce, human resource management,
and procurement are included in what type of value chain function in a
business?

Secondary value function

Primary value function

Tertiary function

Complimentary function

§  15

Enterprise, as a main component of business, requires which
of the following?

Operating from an appropriate facility

Inputs, machinery and computers

Employing the right people for the tasks

Foresight, drive, knowledge, and ingenuity

§  16

What was the original purpose of the limited liability company?

To encourage investors to take financial risks to ensure a
business’ success

To control specialization of new businesses

To favor creditors with the ability to seek recovery of assets
to repay debt  

To limit financial risk exposure and encourage formation of new
businesses

§  17

This is the point at which the supply of the product just meets
the demand for it.

Market

Supply curve

Demand curve

Margin

§  18

What equation correctly shows how profit is calculated?

Profit = (Total Operating Costs) – (Total Sales)

Profit = (Purchases) – (Total Sales Revenues)

Profit = (Total Sales) – (Purchases)

Profit = (Total Sales) – (Total Operating Costs)

§  19

Which of the following best describes a joint-stock company
structure?

Stock ownership creates unlimited liability if the business
fails.

An entrepreneur raises capital by issuing stock ownership for
others to share the risk.

Multiple professionals share general costs and management
leadership.

One person assumes the liability for the business venture.

§  20

Which of the following businesses best matches the definition of
a sole proprietorship?

Professors, nurses, or taxi drivers

Lawyers, bankers, or accountants

Bus drivers, hotel managers, or painters

Dentists, carpenters, or plumbers

§  21

Which term refers to the total money or assets of a business?

Wealth

Capital

Sales revenue

Competitive advantage

§  22

What is defined as the absolute monetary difference between
sales revenues and operating costs?

Profit

Profitability

Demand

Supply

§  23

If a business partnership grows, what is usually added over
time?

Increased stock percentage for partners

New professional members adding capital into the business

More revenue allocated to management

Management control

§  24

Which of the following best describes a system through which
goods or services are exchanged for capital with the aim of making a profit?

Value-creation process

Competitive advantage

 

Productive resources

 

Business

§  25

Which equation correctly shows how to calculate profitability?

Profitability = (Total Profit) / (Total Amount of Capital
Invested)

Profitability = (Total Profit) – (Total Amount of Capital
Invested)

Profitability = (Total Amount of Capital Invested) – (Total
Profit)

Profitability = (Total Amount of Capital Invested) / (Total
Profit)

§  26

How does specialization assist a business in becoming more
productive?

Better equipment aids employees in increasing their output.

Employees become more skilled at specific tasks.

Product management is more efficient and easier to maintain.

Sunk costs are eliminated by reinvesting into new product lines.

§  27

If a company were to have a total sales revenue of $50 and a
total operating cost of $37, what is the total profit?

$13

$87

 

$37

$ -13

§  28

What defines a group of companies that have similar products and
business activities?

Industry

Business system

Field of interest

Business model

§  29

Which of the following businesses is the best example of when to
set up a limited liability company in order to control financial risk of the
stockholder(s)?

Hertz Car Rental

Prudential Insurance

Wal-Mart

Joe’s Neighborhood Pet Store

§  30

Which of the following is the best example of a business
partnership?

Politicians who share expenses for a campaign

Restaurant owners who share the same cuisine in a common
geographic area

Employees of a large computer manufacturer

A group of similar professionals who start a company together

§  31

What are the four productive resources that make a business
possible? 

Land, labor, capital, enterprise

Supply, demand, land, labor

Sales, profit, profitability, supply

Capital, labor, supply, demand

§  32

What are the three components that make up a business system?

Business commerce, business organization, business occupation

Business organization, business management, business exchange

Business commerce, business organization, business market

Business market, business management, business organization

§  33

Which of the following best describes limited liability as it
relates to a business?

Limited liability discourages entrepreneurs to start new
businesses.

If the business fails, personal assets of the owner(s) are at
risk

Creditors are entitled to recover outstanding debt beyond the
financial assets of the business.

The stockholder’s financial liability is limited to a fixed
investment amount.
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